IRS Registered Tax Return Preparer
The information provided on this page is our best knowledge to date. As the IRS Registered Tax Return Preparer regulation continues to evolve we will keep you posted here.
Updated Dec. 22, 2011
The Internal Revenue Service’s (IRS) registered tax return preparer regulation attempts to better monitor the tax return preparation industry by requiring anyone who prepares federal returns for payment to obtain a PTIN, or preparer tax identification number, prior to the start of the 2012 tax season. In addition, some non-CPAs must comply with testing and education components under the new regulation.
PTIN information
Apply for or renew your PTIN through the IRS online or by mail. For the 2012 tax season, an initial PTIN will cost $64.25 while a renewed PTIN will cost $63. PTINs must be renewed annually prior to beginning tax work.
How will you be impacted?
Active CPAs
Active CPAs paid to work on federal tax returns must maintain a PTIN prior to signing off on any work during the 2012 tax season.
Aside from needing to maintain a PTIN, CPAs, attorneys and enrolled agents are exempt from the other requirements of the registered tax return preparer regulation. This is due to the rigorous process involved with earning and maintaining these specific credentials.
Non-CPAs working for CPA firms
Some non-CPAs who work on federal returns are required to maintain a PTIN. They are not, however, required to comply with testing and educational components related to the registered tax return preparer regulation provided they are supervised by a CPA. These individuals may also be subject to a background check and fingerprinting, as determined by the IRS.
Corporate employees responsible for tax filings
If you work on federal filings within a corporate setting, you are not required to comply with this regulation as long as the work you are doing is for your employer. This includes payroll taxes as well as completing an employer's federal return.
Tax Volunteers
Unpaid volunteers who provide tax assistance through groups like VITA and AccountAbility Minnesota are not required to have PTIN by the IRS. Check with the group you are volunteering with, however, as some are choosing to require a PTIN regardless.
Non-CPA tax return preparers
For non-CPA tax return preparers, you must abide by IRS registered tax return preparer rules if you will be preparing and signing federal returns for payment during the 2012 tax season. Your only requirement for the 2012 tax season is to obtain or renew your PTIN prior to beginning work on returns. You will also be subject to a background check and fingerprinting.
If you obtain or renew your PTIN prior to the end of the 2012 tax season, you will have until Dec. 31, 2013 to complete the testing requirement to become a registered tax return preparer. Following the 2012 tax season, all tax return preparers applying for a PTIN for the first time will be required to pass the competency test before being issued a PTIN. This exam has now been made available and will focus on 1040 returns.
In addition to the testing component, there will be an annual education requirement of 15 CPE hours that all registered tax return preparers will need to meet. This includes 3 hours of federal tax law updates, 2 hours of ethics and 10 hours of other federal tax law. The education component is expected to begin in 2012.
Note, self-promotion of the ‘registered tax return preparer’ designation is not allowed until an individual has completed all necessary requirements of the regulation including testing, education and a background check.
Inactive CPAs
If you are an inactive CPA that files a handful of returns each year for payment, this new regulation requires you become a registered tax return preparer. You must complete the competency exam in order to earn registered tax preparer status. You also will have an annual CPE requirement of 15 hours.
Resources
Stay informed with these helpful links:
Please contact the MNCPA membership department at 952-831-2707 x2 or by
email with specific questions related to the IRS registered tax return preparer regulation.